Economy & Budget

Dr. King's Birthday

Often, when reflecting on Dr. Martin Luther King Jr.’s dream for the realization of America’s promise, we get stuck on the social justice issues, and don’t see the larger focus. While a change in the social climate was much needed, often we forget that Dr. King’s dream was one of more than just social equality — it was also one of financial equity and fiscal responsibility.

King described his dream as being "deeply rooted in the American Dream." In general, the "American Dream" is defined as having the opportunity and freedom that allows all citizens to achieve their goals in life through hard work and determination alone. It generally refers to the idea that one's prosperity depends upon one's own abilities and hard work, not on a class structure. For some this translates into the opportunity to achieve more prosperity than they could in their countries of origin; for others, it is the opportunity for their children to grow up with a good education and great career opportunities.
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Freezing Foreclosures and the False Flag of Moral Hazard

In my view the probabilities for the economy are these: 1 in 3 there is no recession, 1 in 3 there is a mild recession, and 1 in 3 there is a very severe recession that imposes long-term hardships in an economy cycling downward.

For many months I have been championing a freeze in foreclosures, in an attempt to halt the wave of foreclosures, the spread of the crisis to credit cards and the potentially severe recession that is now coming into view with some chance of occurring.

Most likely next Tuesday, in a column that will appear in The Hill newspaper, I will push even harder for the foreclosure freeze and for an economic stimulus significantly larger than the package currently under discussion.
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Everyone Has to Pay a Price

I am not an economist, so beware, but I do have some thoughts about what the Fed chairman, administration and Congress are desperately trying to do with this stimulus package.

I think their main point is correct: that what we need is to stabilize the mortgage market and help people keep their homes, not a massive stimulus package to benefit big banks, many of which made bad bets. What Fed Chairman Ben Bernanke said, and I think is right, is that whatever is done has to be very short-term to help individuals get through the next six months.
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Grapes of Wrath for Some, Wonderful Life for Others

Last week in The Hill newspaper I wrote a column calling for a six-month freeze in the foreclosure of homes, to halt the "Grapes of Wrath"-like spiraling of foreclosures that is devastating heartland America, taking down the value of homes for all homeowners and threatening to drive the nation into recession.

Since then, Sen. Hillary Rodham Clinton (D-N.Y.), to her credit, has announced a major initiative following the model of my proposal, and President Bush announces today a plan that offers a freeze in mortgage rates (for some) that is a step forward but does not go nearly far enough.
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War on Jobs

We have all heard of the war on drugs. And the war on poverty. And of course, the war in Iraq, the Cold War, the Civil War and all the other assorted wars we have fought in our nation’s history. But a war on jobs?

House Minority Leader John Boehner (R-Ohio) has leveled that accusation against the Democratic congressional majority in a new report that his office released Wednesday. In it, he says, “Congressional Democrats are waging an undeclared but aggressive policy war on American jobs and economic prosperity.”

The language is purposely provocative in order to capture the attention of the media and perhaps elicit a reaction from the Democrats and from voters.
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A Train Wreck Scenario?

At the end of every Congress, observers and members speculate on a "train-wreck scenario" in which Congress fails to pass spending and other important bills and gridlock ensues between the parties or between the White House and Congress. Happily, this situation seldom plays out, but there are ominous signs that we could be headed for a bad ending to this session of Congress.

Consider the "must-do" items still on the agenda with two weeks to go before the House leaves and three weeks before the Senate calls it quits. In this short period of time, Congress still must pass:
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The Hard-Work Recovery Program

It's time to get real. Let's ignore the politicians with their nibble-around-the-edges happy-talk "solutions" to our biggest problems, and let's talk about what it will actually take to solve them.

Why start with illegal immigration and try to ignore the bigoted hang-'em-high shamefulness of the Republican candidates? Maybe one answer is that employers need to offer wages that will attract citizens and others who are here legally. What they do now is fatten their profits by paying substandard amounts to undocumented laborers who are so desperate to stay hidden they'll accept any pittance they can get. Maybe by doing away with this shadow economy, the jobs that cause so many to sneak across the border will not be waiting for them.
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Thanksgiving in the Two Americas

In our two Americas, this holiday season will be the best of times for some and the worst of times for others, and it is a moment to give thanks not for what we have, but to those who live their lives in the true spirit of America.

Last year at this time there was news of soaring bonuses on Wall Street, including some very lavish rewards for those most responsible for the mortgage financing crisis. We will soon read of lavish bonuses again, and of executives at some offending companies reaping hundreds of millions of dollars of personal wealth through legal insider stock sales as their reward for the American tragedy they helped cause.
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Another Excuse for Failure

By at least one independent account, Congress is about to try for the 41st time to legislate our exit from Iraq. The reasons given by liberals are numerous — e.g., we can’t win, we don’t deserve to win, it is too late to win and my current favorite: The more terrorists we kill, the more we create — sort of a “Night of the Living Dead” excuse. We now have another one: Our effort is “too expensive” and inconsistent with “other priorities.”

Other priorities? By other priorities, Congress usually means the grab bag of special interest favors it loves to bestow on favored constituents, earmarked projects, community action grants, free health insurance for individuals at 300 percent of the poverty line, even a federal subsidy for a museum dedicated to celebrating the Woodstock festival. The liberal media and special interests normally nod solemnly when liberals intone that insufficient monies are budgeted by the Bush administration for “needed social programs.”
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